NAIROBI, Kenya: June 26 (Xinhua) — Ongoing tax and business licensing reforms in Kenya will save the country’s private sector 170 million U.S. dollars every year in expenses they incur when starting a business as the country seeks to lower the cost of starting a business to become more attractive to investors.
Prime Minister Raila Odinga said on Monday in Nairobi that some of the tax and licensing reforms are already ongoing while the review of others is being accelerated to ensure the country does not miss investment opportunities because of the perceived difficulty of starting and operating a business here.
“We do not see why it should take 40 days to complete registration of business in Kenya while it only takes two days in Rwanda,” Odinga said during the launch of the report Doing Business in Kenya 2012 by the World Bank that looks and the business reforms undertaken by 13 municipalities in the country.
Kenya is seeking to remove the tag of being one of the most business unfriendly countries in the world, ranked at position 109 out of the 183 countries according to the ranking by the World Bank.
“This is unacceptable position and we need to work harder so that we improve to a position below 40,” said Odinga.
He said the solution lies in setting up a one stop shop for investors so that all issues of licensing and tax are handled at a centralized point.
“We have been telling investors that we have a one stop shop but that has only been on the paper, the reality is that every step an investor takes is directed to a different government department.” Odinga said municipal authorities should review their regulations so that their quest for more licenses does not become a burden for the businesses.
He said the world over, municipalities are keen to attract the private sector because more investments mean more revenue for the growth of those municipals but that will not happen if the businesses are scared away with high taxation. It is estimated that licensing costs of businesses account for 1.1 per cent of the total annual production of the economy, a figure government said it is too high as it burdens the private sector.
“What we need is to ensure that our municipals are as business friendly as possible to stimulate private sector participation in creation of employment and wealth in these areas,” said Odinga.
Earlier this month, the government announced it had formed a Regulatory Reform Working Committee to coordinate all the regulatory reforms required for doing business in Kenya. The reforms are being undertaken under the Business Regulation Bill, which is currently under consideration with the Attorney General’s office, said Finance Minister Njeru Githae.
The Bill provides for the establishment of an electronic registry for business licenses which will act as a platform for entering, storing and availing information about all business licenses requirement. (Xinhua)
